31 year old looking to retire at 56 Update

[MJT411]

So I want to give everyone a update of where iam at I'm 31 years old now. I got a raise now I make 100k a year. I quit the part time job. I had no free time to golf or play pool lol. I will max out my 457b account this year of 19k my current account balance is 197k. I will max out my roth ira 6k current balance is 21k. I started a brokerage account last year I contribute 175 dollars a month to it current balance is 2.5k. Am I still on target path to retire at age 56 or possible earlier

[Bir48die]

Good news. When I was 31 I could barely survive with one small child and one on the way. Had just bought my first house and it cost me more than half of my take home pay with a SAH wife. Never thought of retirement or any set date. Had some pretty hard times early but was still able to retire early with a nice portfolio. Good luck.

[TDub]

Do you know your current annual expenses?
What do you plan to spend annually in ER?
Knowing those things are a must before you can plan when to call it quits.

Congrats on starting the journey! I look forward to following your story.

[exnavynuke]

Plug your numbers into http://firecalc.com/ and see what it says.

[UnrealizedPotential]

So far you are doing great. Just keep doing that and see what happens. I have found that it is pretty much impossible to plan out that far in advance. But I also think that is it necessary and important to have a goal in mind and reach for it. So by all means , keep that goal, and in 10 years see how things look.

[Urchina]

If you are single with a six-figure salary as 31, you can probably retire well before 56 if you want. You might look at Tanja Hester's book "Work Optional." It just came out and is well done. She also blogs at Our Next Life.

Good luck!

[DrRoy]

You are saving 27% of your income, which is like likely to work out given enough time.

[BeachOrCity]

Quote:

Originally Posted by UnrealizedPotential So far you are doing great. Just keep doing that and see what happens. I have found that it is pretty much impossible to plan out that far in advance. But I also think that is it necessary and important to have a goal in mind and reach for it. So by all means , keep that goal, and in 10 years see how things look.

+1

Just keep saving at a high rate like you are, invest wisely, and periodically check how you are doing in firecalc.

[dd564]

Quote:

Originally Posted by Urchina If you are single with a six-figure salary as 31, you can probably retire well before 56 if you want. You might look at Tanja Hester's book "Work Optional." It just came out and is well done. She also blogs at Our Next Life. Good luck!

If you are single with 6 figure salary... wow. The freedom.

[bigcmagor]

Looks promising. Just remember that while planning is typically linear, results seldom follow a linear path. During the financial crisis, my long-term planning called for ongoing net worth increases and the results were ongoing annual declines. If you maintain the savings rate, you will have options regarding employment that others only dream of in their fifties.

[ckelly78z]

At 31, we already had 1 daughter, but hadn't had my son (who is graduating college in June) I was making a miserable wage/benefits at a job I loved (operating a newspaper press at night). I think I was investing in a 401K, but had maybe $5000, and no savings.

I'm now 53, have 250K in 401K, about 10 in cash, no debt, and a 28 year pension in another 7 years. I should see expenses nose dive in another year or two, so I can start pouring $$ in then to truly be comfortable.

Congrats on your early start, and as long as you can keep that discipline, you should be awash in $$ by 56 years old.

[ponyboy]

Well...this thread means good news for me/us. We had more money than that at 31...now at 35/36...we're pushing 1 million, not including house. That would push us well over...but I never include that.

I always had a goal of retiring at 52...but we'll see...may have to push it to 54.

[Dean56]

You're doing better than most at your age. At 31, I was up to my eyeballs in loan payments (house, car, credit cards).


Do you own a house or rent? You didn't mention it.

[MJT411]

So a little more on me. I bought a house a few years ago I owe 145k on it. I currently have 25k between my checking, savings, and rainy day accounts. I have no credit card debit. I recently bought a used car with car payments of 225 per month for 4 years. I have two pensions that I will get when I'm older one at 67 which I'll get 80 percent of my final pay with 1.5 cola for life or I can get it at 62 but I think I would get 60 percent. I would get another small pension of roughly 1k per month for life at age 65 no cola with the 2nd pension. So i was hoping to retire around 56 then i would need to bridge the gap until i could start collecting my pensions.

[Rowej]

Quote:

Originally Posted by MJT411 So a little more on me. I bought a house a few years ago I owe 145k on it. I currently have 25k between my checking, savings, and rainy day accounts. I have no credit card debit. I recently bought a used car with car payments of 225 per month for 4 years. I have two pensions that I will get when I'm older one at 67 which I'll get 80 percent of my final pay with 1.5 cola for life or I can get it at 62 but I think I would get 60 percent. I would get another small pension of roughly 1k per month for life at age 65 no cola with the 2nd pension. So i was hoping to retire around 56 then i would need to bridge the gap until i could start collecting my pensions.

You should think about paying off the car from your savings, to have no debt, and then pay the $225 / month back into your savings, which in effect is paying yourself the interest you are paying on the car. It should still leave you $15,000 in your checking and savings as an emergency fund.

[North Texas Cajun]

When you reach 55, you might consider asking your employer for parttime status. Paying medical expenses is the big unknown. Also, not a good idea to ever assume you can go back to work if things don’t go as planned. Finding a good job after 55 has been very challenging for some of my friends. A third reason for not cutting all ties is that some early retirees actually miss the intellectual stimulation of some of their coworkers.

[ponyboy]

Is this thread going to remain active for the next 25 years until you're retired?

[MJT411]

Thanks for everyone's input....I will check back and give updates

[Stormy Kromer]

I'm 53 and ER'd at 50. Here's the advice I wish I had received at 31.










- stay away from a broker selling front loaded funds and then charging 1.5% of what's left every year. Just buy index funds at VG like S&P 500, Total Stock Index or even a lifestyle fund like retirement 2065 or beyond.
- Stay away from annuities.
- Stay away from variable universal life insurance (buy a lot of term for the time you need it IF you need it.
- Take enough time for hobbies that you can continue. It's much harder to start a new hobby at 56 than it is to continue a hobby you've been doing for years.


Things I did right.


Marry someone with similar values.
Max out retirement plans, employer sponsored and on your own. It's hard to beat ROTH's for individual plans.
Invest unexpected income
Don't worry about keeping up with the Jonses (they don't care about you anyway)
Stay invested in equities no matter what. I'll guarantee you'll see at least one annual decline of 25% or more before you're 56.
Did I already mention avoid brokerages and invest on your own at Vanguard with their index funds? I started this too late and have found it's been very easy to beat a brokerage, after expenses, without much effort.
Discipline is probably the biggest factor, keep your eye on your goal and don't get distracted.


Good luck to you.

[Dd852]

I retired at 52. The key is that you’re starting early. What’s helped me - any time I got a raise in salary, half of it went right into savings on a continuing basis. Honestly, at the end we were saving 50% of every single paycheck and still felt we lived well. Similarly, when I became eligible for bonuses, I treated the family to a small gift or adventure each year I got one. But the emphasis was on small. The rest of the bonus went right into savings.